Rights Issue & First Quarter Financial Results 2013 17 April 2013 The following presentation is not a prospectus. Its purpose is to serve as information regarding the announced rights issue in CDON Group AB (publ) ("CDON Group"). This presentation must not be made public, published or distributed, in whole or in part, directly or indirectly, in or into the United States, Canada, Japan, Hong Kong or Australia or in any other country where such publication or distribution would be in breach of applicable laws or regulations or would necessitate further documentation being drawn up or registered, or would necessitate any other action being taken, in addition to the requirements laid down by Swedish law. For further information, please see the final page of this presentation.
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Rights Issue & First Quarter Financial Results 2013
17 April 2013
The following presentation is not a prospectus. Its purpose is to serve as information regarding the announced rights issue in CDON Group AB (publ) ("CDON Group"). This presentation must not be made public, published or distributed, in whole or in part, directly or indirectly, in or into the United States, Canada, Japan, Hong Kong or Australia or in any other country where such publication or distribution would be in breach of applicable laws or regulations or would necessitate further documentation being drawn up or registered, or would necessitate any other action being taken, in addition to the requirements laid down by Swedish law. For further information, please see the final page of this presentation.
2
The Board of Directors has resolved upon a rights issue of SEK 500 million in order to strengthen the capital structure. The Board of Directors’ resolution is subject to approval by the shareholders
The rights issue will facilitate the implementation of the Group’s growth strategy
Goal to double net sales from c. SEK 4.5bn in 2012 to more than SEK 9bn in 2017 and achieve a long term EBIT-margin of 3-5%
Currently a strong shift from traditional retail commerce to e-commerce
Through our market leading positions and scalable business models, we are well positioned to capitalise on the strong market growth
CDON Group AB carries out a rights issue of c. SEK 500 million and announces a target of doubled sales
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The rights issue is subject to approval at the EGM on 14 May 2013 (same day as the AGM)
100% of rights issue secured by subscription undertaking and guarantee commitment from Kinnevik
Subscription undertaking by Kinnevik for c. 25% of the rights issue
In addition, Investment AB Kinnevik has committed to guarantee the remainder of the rights issue
− Granted exemption from the obligation to launch a mandatory public offer by the Swedish Securities Council’s (Sv. Aktiemarknadsnämnden)
− Subject to approval with qualified majority at the EGM (excluding Kinnevik’s shares)
Final terms of rights issue to be announced around 10 May 2013
Existing loans renegotiated and long-term credit facilities secured of SEK 275m in total
Commitment and guarantee
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Date 10 May 2013 14 May 2013 15 May 2013 17 May 2013 21 May – 31 May 2013 21 May – 5 June 2013 10 June 2013 13 June 2013
Event The complete terms and conditions of the rights issue are announced EGM resolves on approval of the Board of Directors’ rights issue resolution (AGM held on the same day) First day of trading excluding subscription rights Record date for allotment of subscription rights Estimated date for publication of prospectus Trading in subscription rights Subscription period Announcement of the preliminary outcome of the rights issue Estimated date for announcement of the final outcome of the rights issue
Preliminary timetable Key dates
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Highlights
• Continued year on year sales growth of 10 % in the first quarter to SEK 1,051 mn
• Accelerated growth in Gymgrossisten.com combined with strong operating profit
• CDON.com keeps broadening its range and shows continued growth in tough market
Continued sales growth despite market decline for media products
Operating development • Segment sales up 6% y/y in Q1
• Continued growth in consumer electronics & strong revenue growth in toys, baby clothes and other baby products
• Integration of Bookplus.fi into CDON.com finalized during the quarter
• CDON.com’s development towards becoming a store with an even-wider assortment of consumer goods proceeded according to plan
• Operating profits of SEK 13.3 (24.1) mn in Q1
• Operating margin of 2.6% (5.0%) in Q1
484 512
24 13
5,0%
2,6%
0,0%
2,0%
4,0%
6,0%
8,0%
0
100
200
300
400
500
600
Q1 2012 Q1 2013
Mar
gin
SEK
(m
illio
n)
Net Sales Operating profit Operating margin
8
Fashion
Sales growth with improved operating result
Operating development • Sales increased by 14% y/y in Q1
• Continued positive sales development trend
• Sale of Heppo.com after the end of the quarter
• Operating profits of SEK -17.4 (-38.5) mn in Q1
• Operating margin of -7.8% (-19.6%) in Q1
196 224
-39
-17
-19,6%
-7,8%
-50,0%
-40,0%
-30,0%
-20,0%
-10,0%
0,0%
10,0%
-100
-50
0
50
100
150
200
250
Q1 2012 Q1 2013
Mar
gin
SEK
(m
illio
n)
Net Sales Operating profit Operating margin
9
Sports & Health
39% year on year revenue growth in Q1
Operating development • Sales up 39% y/y in Q1
• Strong growth in all markets resulting in increased market shares and strengthened position
• Launch of Milebreaker.com after the end of the quarter
• Operating profits of SEK 17.9 (13.3) mn in Q1
• Operating margins of 10.1% (10.4%) in Q1
128
177
13 18
10,4% 10,1%
0,0%
4,0%
8,0%
12,0%
0
200
Q1 2012 Q1 2013
Mar
gin
SEK
(m
illio
n)
Net Sales Operating profit Operating margin
10
Home & Garden
Relocation of Tretti’s operations from Stockholm to Malmö finalized
Operating development • The segment’s sales amounted to SEK 143.2 (146.3)
mn in Q1
• Sales growth in Room21 according to plan
• Operating profit of SEK -3.4 (-5.9) mn in Q1
• Operating margins of -2.4% (-4.0%) in Q1
• Room21 expected to reach positive result by the end of 2013
146 143
-6 -3
-4,0%
-2,4%
-5,0%
-3,0%
-1,0%
1,0%
3,0%
5,0%
7,0%
-100
-50
0
50
100
150
Q1 2012 Q1 2013
Mar
gin
SEK
(m
illio
n)
Net Sales Operating profit Operating margin
11
CDON Group Logistics
• On 1 October 2012 CDON Group acquired the logistics operations of the Business Linc BL AB in Falkenberg, which was integrated into the formed company CDON Group Logistics AB
• The operating profit of CDON Group Logistics AB improved from SEK -19.4 mn in Q4 2012 to SEK -12.1 mn in Q1 2013
• Break-even is expected in second half of 2013
12
Financial Performance & Position
13
• Net interest & other financial items of SEK -12.3 (-5.4) mn in Q4 mainly reflected interest costs from:
• The Group’s revolving credit facility
• The Groups overdraft facility
• The Group’s convertible bond issued in December 2010
• Currency variances
• Positive income tax effect of SEK 2.8 (4.5) mn in the quarter
Income Statement
2013 2012
(SEK million) Jan-Mar Jan-Mar
Net Sales 1,051.1 954.3
Gross profit 148.1 135.6
Gross margin (%) 14.1% 14.2%
Operating profit -7.8 -12.1
Operating margin% -0,7% -1.3%
Income before tax -20.1 -17.5
Net income -17.3 -13.1
Basic earnings per share (SEK)-0.26 -0.18
Diluted earnings per share -0.26 -0.18
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• Capital employed increased y/y to SEK 873.0 mn in Q1
• Return on capital employed declined y/y to -22.4% (13.1%) in Q1, which is due to the one off items in 2012
• Total interest bearing loans of SEK 256.5 (411.9) mn at the end of Q1
• Net debt position of SEK 590.3 (196.1) mn at the end of Q1, compared to SEK 246.8 at the end of Q4
• Cash and cash equivalents decreased to SEK 34.5 (170.7) mn at the end of Q1, compared to SEK 126.1 mn at the end of Q4
Financial Position
2013 2012
(SEK million) 31-Mar 31-Mar
Total non-current assets 680.0 611.8
Inventories 643.9 509.6
Total receivables 203.2 143.5
Cash and cash equivalents 34.5 170.7
Total assets 1,561.7 1,435.6
Total equity 248.2 404.0
Interest bearing liabilities 256.5 411.9
Non-interest bearing liabilites 1,057.0 619.7
Total equity and liabilities 1,561.7 1,435.6
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• Cash flow from operating activities before changes in working capital of SEK -62.0 (-32.8) mn in Q1
• SEK -265.1 (201.7) million change in working capital in Q1
• Cash flow to investing activities of SEK -10.4 (-12.0) mn in Q1
Cash Flow
2013 2012
(SEK million) Jan-Mar Jan-Mar
Cash flow from operating
activities-62.0 -32.8
Changes in working capital -265.1 -201.7
Cash flow from operations -327.1 -234.5
Cash flow from/to investing
activities-10.4 -12.0
Cash flow from/to financing
activities249.7 0.0
Change in cash equivalents for
the period-87.8 -246.6
Cash and cash equivalents at the
period's start126.1 417.4
Translation difference -3.9 -0.2
Cash and cash equivalents at the
period's end34.5 170.7
For further information, please visit www.cdongroup.com or contact: CDON Group Investor Relations + 46 (0) 70 080 75 04 [email protected] Follow us on Twitter: http://twitter.com/#!/cdongroup